Uganda’s Economy to grow by 7%

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Uganda’s economy continues to demonstrate strong performance and resilience despite shifts in the global economic environment and the pressures typically associated with an election year, the Permanent Secretary and Secretary to the Treasury (PSST), Dr Ramathan Ggoobi, has said.

Speaking during a press conference on the Third Quarter Expenditure Releases for FY2025/26 on Friday, Ggoobi said the country’s growth trajectory remains firmly positive, underpinned by prudent macroeconomic management and strategic Government interventions. "Key economic indicators point to sustained momentum in growth, going forward."

According to Ggoobi, Gross Domestic Product (GDP) growth stood at 6.3 percent in FY 2024/25 and is projected to rise to between 6.5 and 7 percent in the current financial year, with double-digit growth expected in the medium term.  The average economic growth for Africa is 3.9%.

“As a result of this strong performance, the size of the economy is projected to increase to $68.4b, equivalent to sh249.4 trillion, this financial year,” he said.

He noted that inflation, which often spikes during election periods, has remained unusually stable.

"Headline inflation held at 3.1 percent in both November and December 2025. This is uncharacteristic of an election year,” he said, adding, “Indeed, Uganda registered Africa’s lowest inflation rate in the past decade.” 

He attributed this stability to “Government’s strategic investment in food production, effective monetary policy that has kept the shilling stable against major currencies, and the strategic decision for direct importation of fuel by UNOC, which together have stabilised prices.”

On the exchange rate, Ggoobi said the Uganda Shilling has remained strong and stable, particularly against the US dollar. “The shilling has appreciated by 2.45 percent in the year ending December 2025,” he said, adding that “currently, the Uganda Shilling is the most stable currency in the world, followed by the UK Pound Sterling and the Hong Kong dollar.”

External sector performance has also improved markedly. Exports of goods and services reached $13.4b in FY 2024/25, with $10.6b earned from goods alone.

Surplus hits $2.37b

For the year ending November 2025, exports of goods stood at $12.79b. “Consequently, Uganda registered a Balance of Payments surplus of $2.37b for the year ending October 2025, from a deficit of $683m a year ago,” Ggoobi said. “This is the highest surplus recorded in the last 15 years.”

He explained that the surplus was supported by “an all-time high financial account surplus of $5.6b, driven by strong foreign direct investment and portfolio inflows.” FDI rose to $3.5b, while portfolio inflows reached $1.7b by October 2025.

Remittances from Ugandans abroad increased to $1.6b (sh5.76 trillion) in FY 2024/25, up from $1.1b in FY 2020/21. Tourism also rebounded strongly, with earnings of USD $1.7b, driven by peace, competitiveness and Government investment in tourism infrastructure.

Ggoobi further says that despite the election year, business confidence remains upbeat. “High-frequency indicators show that business executives have maintained optimism,” citing a Business Tendency Index of 57.2, a Composite Indicator of Economic Activity of 183.5, and a Purchasing Managers’ Index of 53.8 as of November 2025.